Victorian Government to spend asset sale profits on rail upgrades

Profits from the sale of the Rural Finance Corporation will be invested in upgrading regional rail tracks.

The Victorian Government has dropped a pre-Budget bombshell, by selling the Rural Finance Corporation to Bendigo and Adelaide Bank for a tidy $1.78 billion.

Rural Finance Corporation has a rural lending portfolio of worth $1.69 billion and has been in state ownership for 65 years.

It also has managed all the State and Federal natural disaster relief funds and farm finance concessional loans.

The Victorian Government says funds from the sale of RFC will mainly be spent on upgrading rail tracks in regional areas.

Victoria is the first state to announce a sell-off of assets to take advantage of the Federal Government's 15 per cent incentive payments for privatisation.

Nationals Leader and Minister for Rural and Regional Development Peter Ryan says every cent of the net profit from the sale, around $400 million, will be spent in regional Victoria.

CEO of Rural Finance Rob Goudswaard says the Bendigo and Adelaide Bank will now provide the State and Federal Government concessional loans and disaster relief on a fee-for-service basis, as is done in other states.